UK tax crackdown to suffer as investigators retire

The Government’s clampdown on tax evasion risks being undermined by a shortage
of experienced tax investigators as a growing proportion of workers near
retirement, an internal HM Revenues and Customs (HMRC) presentation has
revealed.

Around one third of staff at HMRC’s enforcement and compliance division, which is leading efforts to counter tax evasion an 'aggressive' tax avoidance, are aged between 50 and 59.Photo: Alamy

The exodus of the department’s most experienced tax professionals comes as HMRC attempts to meet a Treasury target for increasing the amount of tax it collects.

In 2010, Chancellor George Osborne allocated £917m of funding to HMRC to help tackle the “tax gap” and raise additional revenues of £7bn a year by 2014-15.

Around one third of staff at HMRC’s enforcement and compliance division, which is leading efforts to counter tax evasion and “aggressive” tax avoidance, are aged between 50 and 59, said the presentation.

The presentation also said that the number enforcement and compliance workers aged over 55 are expected to rise each year between 2015 and 2019.

It continued: “We have done some initial modelling about reducing headcount costs ... based on replacing people retiring with a cheaper younger workforce.”

HMRC has cut about 37,000 jobs since 2005, according to the Public and Commercial Services Union, and plans to cut around a further 10,000 jobs by 2015 to reduce costs.

Peter Lockhart, national officer at the PCS, which represents the majority of HMRC workers, said: "HMRC [staff] retirement figures are higher than we thought. HMRC is so grossly understaffed that it is going to struggle to bring in the money the Treasury needs.

The issue of an aging workforce is going to exacerbate the problem and will be further compounded by the government's decision to cut a further 10,000 HMRC posts."

Richard Mannion, national tax partner at accountancy firm Smith & Williamson, said a common complaint about young HMRC tax inspectors is that they “know a little about a little, rather than a lot about lot [compared to] in the old days.”

He said the quality of training HMRC gives its tax inspectors has deteriorated.

In a statement HMRC said: "Like all forward looking organisations, we develop new talent to take over as more senior people come to the ends of their careers. We have training programmes in place across HMRC to ensure we have the right people in post irrespective of length of service or seniority."

In April, HMRC said that it would link up with Manchester Metropolitan University to retrain its tax officials. The joint venture will create a degree in tax, which it is hoped will yield £2m to £3m in extra tax revenues per graduate over four years.